THIS year in June, the prime minister boasted that he was taking major steps to ensure that the income of farmers doubled in the next three years, i.e., by 2022. These remarks came in the context of sustained and often coordinated peasant struggles throughout the country, which highlighted the deteriorating plight of the farmers. The fact of the existence of suffering farmers, more than 12,000 of whom have committed suicide every year since 2012 (and more than three lakhs since the mid-1990s), has been largely denied by successive governments. This is also evident in Modi’s statement which implies that the government is doing a lot for the Indian farmer. Therefore, all agitation is ‘political’ and aimed at defaming the rulers of the day. However, if we look at the emerging data closely, it is clear that the government’s pro-farmer claims are untenable as is seen in the NABARD’s recent report on financial inclusion in rural India.
The NABARD survey was conducted between July 1, 2015 and June 30, 2016 and covered 40,327 households in 245 districts from 29 states. The total population covered by the survey was 1,87,518 persons. Of these, 48 percent of all households have been classified by the survey as “agricultural households”. Agricultural households are defined as households who produce more than Rs 5000 worth of agricultural output in the reference period (i.e., the period of the survey) and at least one self-employed family member in agriculture. All other households have been classed as “non-agricultural” households.
The assumption of the survey is that a ‘farmer’ is one who cultivates or works on land, and does not necessarily own that land. This means that the definition of the ‘farmer’ has little to do with the ownership of land as classified in this survey. This is evident from the data presented by the study. The average landholding by all households (inclusive of homesteads) at an all India level is 0.54 hectares. For agricultural households it is a mere one hectare including homesteads, thus implying that most land holders have sub-marginal holdings. The survey also collected evidence on the number of farmers who leased in or leased out lands. About 12 percent of the farmers leased in lands and two percent leased out lands. In terms of total land possessed (defined as a sum of owned as well as not owned but operated land through leasing), more than 65 percent of the agricultural households had access to less than one hectare of land. Further, less than five percent of the households reported high value assets like tractors, sprinklers etc and that too, from the green revolution regions like Punjab and Haryana. Another important aspect of asset ownership was the fact that more than half the agricultural households owned milch cattle and also derived a significant income from it as will be seen later in this discussion.
INCOMES AND SURVIVAL STRATEGIES
The poor access to land and other assets is reflected in the dependence of the agricultural household on more than one source of income. The survey shows that about 80 percent of the households depend on at least two sources of income. The average income of an agricultural household is calculated at Rs 8,139 per month out of which cultivation contributes 35 percent, wage labour 34 percent and livestock rearing 8 percent. However, the survey also records that 79.9 percent of the agricultural households earn less than this average (46.6 percent earning about Rs 5,324 per month and 33.3 percent about Rs 7,850 per month). This means that the average is driven high earning farmers in the top 10 percent which earns an average of Rs 22,269 per month. It is interesting to note that the difference the inequalities within the top twenty percent are also high with the income of the top ten percent being almost double that of the rest. This analysis indicates the growing inequity within rural India and shows that the government’s claims of impending rural prosperity are indicated by this trend.
Another significant feature of the survey is that it proves that incomes from farming are not going up. The data on the sources of income shows that those who perform wage labour have a higher monthly income than marginal farmers who are tied to the land for a part of the year. Though neo-liberal policy makers may interpret this dependence on multiple sources as ‘diversification’; however the data clearly indicates that the farming system is under severe distress. For example wage labour is the highest source of income for all agricultural households which have less than one hectare of land. It is only a major source of income for the top six percent who own more than two hectares of land (but even here 20 percent of the income comes from wage labour). This shows that the peasantry is being driven to casual wage labour in order to survive and this signifies high agrarian distress which is currently denied by the government.
The other important theme focus of the survey is on the question of indebtedness and savings. Here the definition of “saver households” used by the NABARD is any household that has any surplus income in order to meet emergency expenditure after consumption of goods. But this definition is inadequate and this is revealed by data itself. The survey claims that about 55 percent agricultural households are “saver households” despite the low level of their so-called savings. The average “saving” is said to be about Rs 1,500 with the lower end of the peasantry saving less than Rs 1000 per month and that too primarily in self-help groups which are classified as “institutional savings”. Curiously the survey does not give any data on access of the farmers to banks, thus not fulfilling the objective of the survey, which was to study “financial inclusion” The fact that the propensity to have savings is overestimated by the survey is clear because it shows that only 2.8 percent of the households have the capacity to invest and acquire new assets. Hence we cannot be sure whether low saving households are also simultaneously indebted or not since the survey does not dwell on this question.
In contrast, the figures for indebtedness are a little more revealing as it shows that the average per household debt of an agricultural household is Rs 1,32,966 per year or about Rs 11,085 per month which is more than the monthly income of roughly 80-90 percent of the households. What is even more telling is the fact that the difference in the amount of debt between the top 10 percent and the bottom 10 percent is only Rs 30,000 which means that the debt of the lowest end of the peasantry is very high in comparison to their income. For example, the class of peasants who have an average annual income of about Rs 60,000 takes debt of about Rs 41,622 per year; where as those with annual incomes of about Rs 2.6 lakhs take a debt of approximately 74,000 a year. Further a large part of the indebtedness was because of crop failures and only 10 percent of them got loans from banks. This once again invalidates the claim of the union government that farmers are borrowing for non-agricultural purposes and that there is no crop failure. In sum, the report only strengthens the assessment of the democratic peasant movement and provides it with further evidence to strengthen its overall struggle.